23andMe, the genetic testing company, is considering selling its telehealth business, Lemonaid Health. This comes as the company faces significant challenges, including a major stock price drop and a recent data breach.
In 2021, 23andMe acquired Lemonaid for $400 million, aiming to enhance its telemedicine services by leveraging genetic data. However, the company’s stock has taken a hit after a data breach in 2023 compromised the information of nearly 7 million users. This breach led to a $30 million class action lawsuit, putting more strain on the company.
Since going public in June 2021 at $11.13 per share, 23andMe’s value has plummeted. By September 2023, shares were trading as low as $0.35. In response, the company executed a reverse stock split to avoid getting delisted from the Nasdaq. As of January 2024, shares are valued at about $3.60.
The financial troubles have compelled 23andMe to cut its workforce by 40%, or roughly 200 jobs, and cease its drug discovery initiatives. With a market capitalization of around $91 million, the company has drastically lost value since its public debut, when it was valued at $3.5 billion.
After the data breach, which was kept under wraps for five months, 23andMe acknowledged the severity of the situation and settled the ensuing lawsuit. The company plans to address its issues internally, with CEO Anne Wojcicki proposing, at one point, to take the company private. However, this proposal faced rejection from the board. Later, an openness to a possible acquisition was expressed, but those comments were also retracted.
As 23andMe navigates these turbulent waters, the future of its telehealth service remains uncertain. The company hopes to recover and restore its reputation in the market.
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